What Is an EIN?

The Federal Tax ID Number, commonly referred to as an EIN (Employer Identification Number), serves as a unique identifier assigned by the IRS for the purpose of managing tax regulations. Employer Identification Numbers play a crucial role in distinguishing an entity for the IRS, financial institutions, and other commercial entities.

Imagine this number as the business equivalent of a social security number. The EIN is generally a prerequisite for conducting business activities in the United States, establishing banking operations, hiring personnel, and fulfilling tax obligations with the IRS.

What is an ITIN?

The Individual Taxpayer Identification Number (ITIN) is a unique tax identifier exclusively accessible to certain non-U.S. residents, resident aliens, as well as their spouses and dependents who are unable to acquire a Social Security Number (SSN). ITINs always commence with the digit “9” and typically follow a format resembling a Social Security number: 9xx-xx-xxxx.

Creating a Delaware corporation or LLC as a non-resident is entirely acceptable when the foreign individual or group applies for an ITIN. If there exists a tax filing obligation with the IRS, obtaining an ITIN becomes imperative.

For instance, when a company generates U.S. source income and experiences profits or losses that pass through to its members or shareholders, it is customary for owners to secure an ITIN to fulfill tax filing requirements with the IRS.

ITINs are issued irrespective of immigration status, as both resident and non-resident aliens may find themselves subject to a U.S. filing or reporting obligation under the Internal Revenue Code.

Require assistance in obtaining your ITIN? You can acquire an ITIN Number by completing Form W-7 and sending it to the IRS. Alternatively, you may reach out to one of the ITIN acceptance agents enlisted by the IRS for guidance. These agents are available within the U.S. as well as in numerous countries worldwide.

Before establishing your next corporation, ensure you comprehend the distinction between an EIN and an ITIN.